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Iliad, the low-cost French telecoms company owned by billionaire entrepreneur Xavier Niel, grew profits by a fifth last year as its mobile revenues passed €2bn for the first time.

The group’s net profits grew 20 per cent in 2016 to over €400m,according to its annual results published on Tuesday. Overall turnover was up 7 per cent to €4.7bn during the year.

Five years after Iliad disrupted the French mobile market by bursting on the scene as the fourth operator with a low-cost service, the group has grown to represent almost a quarter (24 per cent) of fixed line market share, and 18 per cent of the mobile market, it said on Tuesday.

Iliad’s mobile revenues grew 12 per cent in 2016 as subscribersmigrated to its more expensive €19.99/month offer, which helped to increase average revenue per user – a key measure for telecoms providers. The number of 4G subscribers grew 60 per cent to almost 6m.

During 2016, Iliad invested nearly €1.3bn in fixed and mobileinfrastructures in France.

Maxime Lombardini, chief executive of Iliad, said:

The increase in profits is mainly through the mobile business. It’s a mixture of improving our mobile coverage and improving the subscriber mix.

The group has now set its sights on Italy. In July last year Iliad signed an agreement with the Hutchison and VimpelCom groups, as part of the merger of H3G and Wind, to acquire assets that enable it to become the fourth mobile operator in Italy.

On Tuesday Iliad gave no further details on its launch in Italy, and said it’s a “unique opportunity.”

The launch is targeted for later this year and Iliad will have a market share of less than 10 per cent in the country’s mobile market.